The client

Our client was a director and shareholder of a privately owned consultancy business, held on a 50:50 basis with a business partner. The business had grown steadily over several years to a turnover of around €1.0m, with an established client base on multi-year contracts.

The situation before Sakura

The business had been built successfully by the two directors working closely together. Responsibilities had naturally divided between them, with one focused on client relationships, delivery and growth, and the other on the operational side, invoicing, payroll, VAT, cashflow and annual compliance. That arrangement worked well while both directors were aligned.

Everything changed when one director unexpectedly decided to leave, presenting a valuation for their 50% share and looking to move quickly. For the remaining director, this created instant uncertainty. There was no Shareholders' Agreement in place, and so no agreed process for valuation, exit, or dispute resolution. A successful working relationship suddenly became a potentially difficult and personally challenging situation.

What happened

Sakura's involvement came through a historical relationship with Damian Connolly, and our client reached out for an initial discussion on where to start.

The first step was establishing the basics: was the departing director definitely leaving, and was our client committed to staying and continuing the business? Once that was clear, the next step was to get a written outline of the departing director's valuation and requirements, to give the discussion some initial shape.

Two risks were clear from the outset: the relationship between the directors, while still amicable, was unlikely to stay that way once the terms were challenged, and without a process to work towards, the situation could drift into deadlock, months of debate and emotional argument that would end up damaging the business itself. The priority became keeping discussions focused and professional, managing expectations early, and accepting that not every point could be won.

What changed after working with Sakura

We started with a practical review of the business's financials, to check whether the proposed valuation was broadly reasonable and to flag any issues that needed attention. What we found was that the valuation wasn't unreasonable as a starting point, and in some respects didn't fully reflect the value of the business, while a number of inaccuracies in the financials also needed correcting. That gave us real, specific points for informed negotiation.

Rather than rejecting the proposal outright, the approach became one of structured discussion: accepting the general range while using specific points to shape the outcome. Over the following months, negotiation and compromise moved things forward, some issues pushed back on, others allowed through to keep momentum, always with the bigger picture in mind. Alongside this, we worked through practical funding options for the buyout, including overdraft facilities and external finance, and made sure the share buyback was structured tax-efficiently.

The relationship became more strained at points, particularly around post-exit expectations, but after around six months the exiting shareholder left with a broadly acceptable outcome. Our client moved to full ownership and retained control of the business, without the situation drifting into prolonged dispute. There was some short-term pressure on cashflow following the buyout, but in the medium term our client kept control, could pursue future opportunities without constraint, and the underlying value of the business stayed intact.

Why this matters for other SME owners

This isn't an unusual situation. Many businesses are built on strong personal working relationships, without formal agreements in place for when circumstances change. A Shareholders' Agreement won't prevent disagreement, but it gives you a framework for handling it, so a situation like this doesn't become drawn out and damaging. More broadly, it shows the value of having experienced financial and commercial advice at exactly the point you need it most, when valuation, negotiation and structure all come into play.

Frequently asked questions

What happens if a business partner wants to leave and there's no Shareholders' Agreement?

Without an agreement in place, there's no pre-agreed process for valuing the departing shareholder's stake or resolving disagreements. It's still possible to reach a fair outcome, but it takes longer and relies far more on structured negotiation, an honest financial review, and both sides staying focused on the bigger picture rather than individual points of disagreement.

How is a shareholder's exit valuation worked out?

There's no single formula. In practice it starts with a proposed figure, then a review of the business's financials to test whether that figure is reasonable, identify anything it doesn't reflect, and correct any inaccuracies. That review becomes the basis for negotiation.

How long does a shareholder buyout usually take?

It varies with complexity, but a process like this typically runs over several months from initial valuation discussions through to completion, funding arrangements and tax structuring.

Take the next step

If you're in business with others and haven't formalised how a departure would be handled, for example through a Shareholders' Agreement, it's worth addressing while relationships are still strong. If you're already facing a shareholder exit, the priority is bringing structure, clarity and a level head to the process as early as possible.

If this feels familiar, or you'd simply like an outline of where to start, book a call with Sakura.